More Japanese Companies Are Selling to 'Survive' After COVID, Says Covington's New Cross-Border M&A Leader

More Japanese Companies Are Selling to 'Survive' After COVID, Says Covington's New Cross-Border M&A Leader

November 17, 2021, The Recorder

Tai Kimoto spoke with The Recorder about joining Covington as earlier this month as the co-lead of the Japan initiative. He said, "Covington has a very strong regulatory practice. In the last three or four years, I have been involved in a lot of aspects of work related to the Committee on Foreign Investment in the United States (CFIUS) in my M&A practice. CFIUS has become a part of a very large volume of my M&A practice."

When asked about M&A trends, Tai added, "A long-term trend is an increase in M&A transactions between Japanese companies and the U.S. or the other parts of the world. I think this is partly because of the Japanese economy shrinking because of the decrease of the population. So in order for them to survive, they have to find a way to survive outside of Japan. So now it’s been nearly two years since the start of the pandemic, some Japanese companies cannot wait any longer. I’m now seeing the effects of those trends from the second quarter of this year."

"Before the pandemic, most of my M&A deals were buy-side, but after the pandemic, I’ve been involved in sell-side M&A. And I don’t think that trend will decrease because of the end of the pandemic," Tai said. He spoke specifically on Japanese M&A trends, adding, "I think more and more Japanese companies will start to think about selling. They used to have a lot of hesitancy selling, but I think that’s become less. And I expect the number of deals to rise."

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